How the construction of indices has influenced fund performance

Nick Dewhirst, CEO, INvestors-routemap.co.uk If a fund manager beats an index for any length of time, we fete him as a genius, but is that really so? As in any field of intellectual activity, there is a great deal more to the construction of indices than an outsider may suspect. Having built some index families myself, I can confirm that there is often less than meets the eye to such genius. Here, therefore, is a short history of index development, which shows how the industry has progressively refined the concept of fairness as understanding and computing power have increased over the...